Board 8 > Stock Topic 13

(+) Yeah! (+)

So question for people who have been trading long enough to know how taxes work with stocks. I made about 30k last year from 10-15k (slowly deposited more throughout the last half of the year), but I bought and sold almost a million dollars worth of stocks and my adjusted gains in my cost basis is super low, around 6%. Is this...good for my taxes? I figure having an adjusted gain that low has to be better for taxes than the 200-300% I actually made, right?

I've been worried that I made so much money, I would end up having to pay a huge chunk of that back for taxes. It might also be worth noting I made significantly more money in the market than at my job last year, as my normal income will probably be under 20k.

Adjusted gain could be totally irrelevant here and I will still owe money, but the low percentage gave me hope! Any help is appreciated. I'm probably gonna have to get a tax guy for the first time ever.

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The percentage shouldn't matter, just the amount of the net gain.

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As I understand it stocks are more simple than they look for taxes

If you don't own a stock for a year any net gains you realize (ie from stocks/options you've sold) are basically added to your taxable income
Net losses you realize will offset those net gains and let you reduce your taxable income, but only if you don't rebuy the stock for a month (options that expire worthless will also count as a loss here)
If you do own one for a year+ you get a reduced rate on your gains

Amount of buying and selling doesn't matter just what you cash out of and the net effects of that on your income

Maybe I'm missing something here though

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That's what I figured, damn. I mean, it would be insanely easy to cheat the system otherwise so it makes sense.

Yeah, I knew about holding a stock for a year for way lower tax rates. Another reason I'm interested in getting in some other SPACs on the ground floor.

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I like how FUBO is up 20% on news we knew a month and a half ago *eyeroll

Profit is profit now "trapped" in sold $32 calls. Hoping for pullback tomorrow as people realize "we knew this"

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Seeing all these cheap ass stocks run lately I bought 12 $1 2/19 calls on GLOBALSTAR for $150

Kinda risky to do this on a stock that's doubled in the past week but we'll see how it goes.

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I actually bought 700 shares at $0.89 and sold $1 calls on them that expire a couple of days from now for $12 each. So I effectively have the shares for $0.77 or I make a quick ~15% profit in a few days. Seems win-win as the stocks seem worth $0.77 to me. And if it rockets I have my stack of 2/19 calls.

Not much DD here just 5G + analyst hype and an EPS that doesn't seem awful. Guess we'll test Red Sox's "don't buy something you're considering if it's already gone up 40%" theory today.

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I should have held fubo@@@@@@

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I bought 5 $55 calls that expire in two weeks when FUBO was at around $35

It's kind of a hedge I guess. If it actually gets anywhere near that high I can sell them to buy my sold contracts back and sell them again at a higher premium.

If it doesn't then I don't feel nearly as bad about being forced to sell my shares at $32.

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Apple has big news

What it mean lopen


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Is it more tax advantageous to do LIFO for a stock that you bought for X price then bought again at Y price, with X price being lower?

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I miss talking about stocks

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Its much less exciting nowadays, and even the past several months. The stocks arent as volatile anymore so its not as much fun. But there is always money to be made!

We may not match the awesome euphoric goodness of the market from March - June 2020 for a long time. But hey, can't complain about setting all-time highs every week!

At some point, we will get into another bear market. Who knows when though.

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So speaking of the March - June steepest bull market in history, someone at WallStreetBets made a really good meme video about it:

https://www.youtube.com/watch?v=rRuum6IUIGE

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The good news is even with bear markets there are relatively common stocks that can go up 10% in a week.

I dunno what you guys are talking about I'm on stocks that have gained 50% in the past week after losing more than that.

Looks like my FUBO plot may play out with big gains this morning. It's all damage control from overly aggressive call selling but if I make like 2k with these bought calls no harm no foul

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Its much fewer stocks now than before.

Just bagged a gain of $500 on my $55 1/22 FUBO calls

Use $150 of that gain on $55 1/22 to move onto 5 $55 1/15 calls

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I sold my calls and they're up 30% :(

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GME up 55% and rising today. Happy I bought this last month!

+90% on the day now.

Nice!

Im gonna hop back on the EVRI train at close.

lmao i can never understand GME no matter how hard i try

what convinced you to buy in other than sheer memery?

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Welp my account is about to hit 60k again, finally. I'm making 5k a day on AVCT warrants this week, but I'm not selling until they hit at least 2 so it's not my money yet lol. I've got all the time in the world.

barreldragon88 posted...

Is it more tax advantageous to do LIFO for a stock that you bought for X price then bought again at Y price, with X price being lower?

Are you selling all the shares at once? If so, it wouldn't matter. However, if you're just trying to sell Y shares and hold long on X shares for like a year or something, then sure. The gains would be smaller, so less owed on those tax returns.


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CoolCly posted...

lmao i can never understand GME no matter how hard i try

what convinced you to buy in other than sheer memery?

The short interest. People shorted over 100% of the float.

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It seems very apparent to me that shorting and warrants are the way to make big money. I just have zero idea how to do this despite multiple people trying to explain it to me. It also doesnt help that I am pretty sure my Vanguard mobile app doesnt have it enabled, if Vanguard does at all.

Sunroof posted...

It seems very apparent to me that shorting and warrants are the way to make big money. I just have zero idea how to do this despite multiple people trying to explain it to me. It also doesnt help that I am pretty sure my Vanguard mobile app doesnt have it enabled, if Vanguard does at all.

Warrants, maybe. Shorting is generally a very difficult way to make money because it runs against the general trend of the market, which is up. You have limited possible gains and unlimited possible losses.

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Ehhh, I'm sure you can make big money shorting some worthless companies that popped off, but I wouldn't do it. Investing long term in warrants is the way to go.

Warrants are just like extra long calls, and if you get in on the ground floor of a promising company early and know the value of what you're holding, yep. SPACs could very well be a bubble right now at large though, that's why I'm only long on the two I find most promising, AVCT and IEA.

People in the AVCT discord got in IEA when the warrants were .20 to .30 in August last year. They've been trading around $6 lately and most are still waiting til $10 to sell.

I got in IEA way late to make those insane gains, so I'm mainly just waiting for AVCT to do the same. My only other holding is KERN.

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Take a look at YGYI. Very consistently volatile 10% up to down multiple times a day, for the past few months. This one could be timed for a profit. I know I know, timing is bad. Just throwing it out there for the bold. Its also in the process of being de-listed...

Here's my one month balance history with AVCTW being 50% of my portfolio. Hasn't adjusted for today, which has been between 51 and 55 grand.

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Take that money and run! You were upset last time that you didnt.

I think you have to have a VERY strong grasp of how shorting and options work to really make money on them, so that you can actually time them correctly and pull them off correctly. You could have a good idea but if you execute it wrong you could lose money quickly and easily. If you don't have a good idea of what you are doing to begin with then making money seems practically impossible. A string of logical events needs to happen for you to make money, so if you can't foresee each of those events it'd be tough to avoid a bad event.

Meanwhile, just buying and holding stocks can either gain or lose regardless of how good your idea is. It's a lot more straightforward. I buy stock, stock go up, I make money!

I think Lopen has had pretty sound logic in his plays so it looks like he might do okay but I think unless you can explain to yourself why you want to make a play on something and how it will work out like he has been doing, you probably aren't ready to try them. That's how I feel about myself anyways. Come to think of it.... that might be why he talks out his strategies here, to say it out loud and confirm it isn't a dumb idea to himself. I'll have to do that when I start trying to do options....

red sox 777 posted...

The short interest. People shorted over 100% of the float.

Hmm. I think there's probably gains to be made here on whatever weird shit is happening with GME, though I haven't really flowed through the logic of it all.

But there has to be more to the upward movement of GME than people trying to game the stock against the other people gaming the stock, right? Or is this just purely circular stock manipulation with no basis on actual value of the company and whoever plays this right will make a bunch of money and whoever doesn't will lose a bunch of money when it eventually crashes?

Or is there actual some serious intrinsic value in Gamestop people see? SOMEBODY must think buying at $31 is a good idea. I haven't been able to really uncover any reason why....

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Sunroof posted...

Take that money and run! You were upset last time that you didnt.

Completely different scenario. It ran 200% in a single day then, and I sold half and put it in the bank (E: then sold the rest the next day, then bought back in too early and held bags again so yeah I goofed ) This has been a steady build up with consolidation. Trust me, I am 100% selling another 200% run if it happens.

But yeah, take a look at IEAWW if you want to get a glimpse of what I think AVCTW will do sometime in 2021.

I even spoke with my uncle's financial advisor yesterday (my uncle is interested in AVCT but was hesitant) who actually has experience with warrants and I think I got him in on these. I was surprised he ever traded warrants before.

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CoolCly posted...

I think you have to have a VERY strong grasp of how shorting and options work to really make money on them, so that you can actually time them correctly and pull them off correctly. You could have a good idea but if you execute it wrong you could lose money quickly and easily. If you don't have a good idea of what you are doing to begin with then making money seems practically impossible. A string of logical events needs to happen for you to make money, so if you can't foresee each of those events it'd be tough to avoid a bad event.

Meanwhile, just buying and holding stocks can either gain or lose regardless of how good your idea is. It's a lot more straightforward. I buy stock, stock go up, I make money!

I think Lopen has had pretty sound logic in his plays so it looks like he might do okay but I think unless you can explain to yourself why you want to make a play on something and how it will work out like he has been doing, you probably aren't ready to try them. That's how I feel about myself anyways. Come to think of it.... that might be why he talks out his strategies here, to say it out loud and confirm it isn't a dumb idea to himself. I'll have to do that when I start trying to do options....

Hmm. I think there's probably gains to be made here on whatever weird shit is happening with GME, though I haven't really flowed through the logic of it all.

But there has to be more to the upward movement of GME than people trying to game the stock against the other people gaming the stock, right? Or is this just purely circular stock manipulation with no basis on actual value of the company and whoever plays this right will make a bunch of money and whoever doesn't will lose a bunch of money when it eventually crashes?

Or is there actual some serious intrinsic value in Gamestop people see? SOMEBODY must think buying at $31 is a good idea. I haven't been able to really uncover any reason why....

I sold my Gamestop shares at $34. I'm seeing that some people think there may be a further short squeeze, but I'm taking my profits here because 122 million shares have already traded today. That is around 100% of the shares in the company, which means that probably a lot of shares have already been exchanged multiple times today. Which means that the short interest could potentially have already gone down a lot as people covered.

GME had some very positive news come out this week, with Ryan Cohen, who has bought up a pretty substantial stake in the company, getting a board seat. He is pushing for Gamestop to aggressively expand its online business. But yeah, hard to see it being worth $34 but for the short squeeze.

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Wait. I'd read a while ago that there's more shorts sold on GME than is really possible with the outstanding shares on the market.

Which means it's difficult if not impossible for short sellers to even get the stocks they need to return the borrowed stock. So they have to buy whatever market price is to return the stock, which since there is SO MANY they are driving up the price because they have to buy at whatever people are selling at, but there's not enough volume so the price goes up until there is. So nobody actually wants to buy at this price - they are forced to do it to cover their position.

Is that what's happening here? Goddamn this is stupid

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Oh yeah that sounds like it is what you are saying. Interesting, so you bought in to screw with all the short sellers.

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What the hell gamestop

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I hope bitcoin pulls back further. Under 25k I'm probably buying and holding and doing my best to not look at it for a long time.

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StartTheMachine posted...

Are you selling all the shares at once? If so, it wouldn't matter. However, if you're just trying to sell Y shares and hold long on X shares for like a year or something, then sure. The gains would be smaller, so less owed on those tax returns.

Nope, not selling everything, just want to understand the tax implications. Thanks!

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Just bought Jan 22 $25 GME Puts

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Actually, GME $25's that expire Friday are worth .75

Converted to Calendar puts. Letssss gooooooo

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Big Five released preliminary earnings, and while the stock went down a bunch for some reason, the numbers are looking very good. They might have beaten 2019's annual earnings despite COVID if the fourth quarter numbers are accurate.

The target might not be $15 anymore, it might be heading to $20.

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I put 75k into EVRI. I have no clue how the market will respond to all the impeachment ongoings, but I know that EVRI is more valuable than $13/share. I got in at $12.82. I am planning on selling the moment it is green.

Ooh, big five doing big things? I may buy into it.

I think EVRI is very risky at this price. It's basically the same price as before the virus a year ago, and it's a lot more volatile than what you usually buy. Granted, the segment of the gaming market that uses EVRI ATMs (not high rollers) is down much less than high rollers, so I can sort of see the bullish case, but 75k seems like too much.

I think it's a good guideline never to put more than half your portfolio in one thing. Although, I know you will probably jump out lightning fast whether it goes up or down, so maybe that affects the risk calculus.

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Correct. It is plausible, of course, that it goes down another 3% in which case I lose $2,250 just like that. But Im up $550 for the year so I dont mind the loss too much compared to the more likely 3% gain, in my opinion. We will see!

Also, theres this. It is currently beneath its 12 month projection.

We both know you're not going to hold for a year though! I guess you'll be fine unless it opens -10% or something one day. Then you'd have a hard decision.

Knowing how nervous you get about shares I would absolutely not get into buying options or shorting stocks, by the way. The volatility on those is on another order of magnitude from shares. Plus, I am pretty sure they are negative-EV on average while stocks are positive-EV on average.

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Haha, Im not but my point is that if I must, I will have the option of holding until it is green.